Setting your allowances


How much can I offer?

  • Under federal law, the maximum yearly allowance for a single participant with no dependents in 2019 is $5,150 ($429.17 per month).
  • If you want, you can offer a higher allowance to employees who are married and/or have dependents (regardless of whether those dependents would be covered under the employee’s health insurance). They can legally receive up to $10,450 per year ($870.83 per month).


Can I offer a percentage of my employees’ total premium cost?

  • No, your allowance must be a fixed dollar amount.


Can I make the full year’s allowance available right away?

  • No, eligible employees will receive a pro-rated amount every month.


Do allowance balances roll over at the end of the year?

  • No, allowances can only be used for expenses incurred during the calendar year when the allowance was accrued.


Can I offer different amounts to different employees?

  • Only based on family status as outlined above.
  • You can choose whether to offer the benefit to part-time employees, but if you choose to offer them the benefit, the law requires that they receive the same allowance as full-time employees.


What can my employees use their allowance for?

  • Most often, eligible employees use their allowance for health insurance policies that they purchase via the ACA exchanges. COBRA, dental, vision, Medicare and a few other less-common types of insurance are also reimbursable.
  • Eligible employees can also use their allowance for over 200 types of eligible medical expenses. [link?]


Can I change allowances midyear?

  • Yes, you can increase or decrease allowances any time during the year for any future calendar month. Allowance changes always take effect on the first day of the month.


Can I choose to cover only health insurance premiums?

  • No, eligible employees can use their allowance for health insurance premiums and any of over 200 qualified medical expenses. See what’s eligible


I have a limited budget. How do I decide how much to offer?

  • We’ve found that employees find value with even small allowances, but employee satisfaction and utilization increase with higher allowances.



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